CBA’s head of Australian economics, Gareth Aird, has warned policy makers against restoring the mass immigration program, arguing that it would lower workers’ wages and lower livability by congesting economic and social infrastructure:
“With international borders closed, there is a greater chance wages growth may accelerate,” said Gareth Aird…
“When you have skills shortages pop up in the economy, that means that workers at the margins have a better chance of negotiating pay rises, supporting higher wages”.
Mr Aird said the same phenomenon could be seen with critical infrastructure like roads, hospitals, and schools.
“We’ve been spending a lot on infrastructure for a number of years now, but a lot of that was the tail wagging the dog and playing catch up,” Mr Aird said.
“Now because you have low immigration at a time of high infrastructure, what we see is what matters to the individual, the amount of money being spent on infrastructure per capita”…
“If we return to what we had pre-COVID than the conditions will resemble what we had pre-COVID, which means softer wages growth and the need for even more investment in schools and roads and health to keep up with the population.”
“It shouldn’t be looked at as a binary issue, but this should be an opportunity for policy makers to look at population growth and find out what the right level of net overseas migration really is,” said Mr Aird.
Mark Latham made similar comments:
“With the RBA pointing to early signs of wages growth because we are no longer flooding the labour market with overseas arrivals, why would any sensible policy maker rush back to Big Australia immigration numbers?” Mr Latham said.
“The longer immigration stays low, the more Australians will have a chance to find jobs, leading to a tighter labour market and wage increases after a decade of wage stagnation.”
Spot on. Australians experienced a decade-plus of crushed wages and living standards on the back of mass immigration. This failed policy must not be allowed to return.
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